7 IN HIGH COURT OF DELHI AT NEW DELHI Date of Decision:- 11.03.2020 ITA 1173/2017 COMMISSIONER OF INCOME TAX Appellant Through: Mr. Raghvendra Singh, Sr. Standing counsel with Ms. Easha Kadian, Adv. versus SANT LAL Respondent Through: Dr. Shashwat Bajpai and Mr. Sarad Agarwal, Advs. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SANJEEV NARULA SANJEEV NARULA, J (Oral): 1. present appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred as Act) is directed against order dated 15th June, 2017 passed by Income Tax Appellate Tax (ITAT) in ITA No. 4730/Del/2009 relating to assessment year (AY) 2002-03 whereby appeal preferred by Revenue against order of CIT (A), has been dismissed. 2. Briefly stated, case of Revenue is that Respondent filed his income return (ITR) for AY 2002-03 declaring income of Rs.2,91,670/- comprising of income from salary from M/s Jagat Agro Commodities (P) Ltd., income from House Property and Capital Gains. On 15th December, 2004, search and seizure operation under Section 132 of Act was Signature Not Verified Digitally Signed ITA 1173/2017 Page 1 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 conducted in case of Sh. Brij Mohan Gupta. During course of search, various incriminating documents/diaries/loose papers were found and seized. During post search proceedings, statements on oath were recorded of Sh. B.M.Gupta, his son Sh. Rajeev Gupta and accountant Sh. Ram Avtar Singhal. search operation revealed that Sh. B. M. Gupta was allegedly engaged in hundi business at relevant time, wherein previously undisclosed money/cash was arranged from various parties including respondent, and same was advanced to different parties for undisclosed interest income on said advanced amounts. Sh. B. M. Gupta and his Group acted as mediator/broker in such clandestine financial transactions and charged commission/brokerage for arranging same. 3. various loose papers/diaries found and seized, contained details of various parties on behalf of whom said Group carried out hundi business. entries found in these documents were coded entries and had been recorded by one Sh. Ram Avtar Singhal, accountant of said group. Sh. Singhal decoded and confirmed said entries by giving correct details of said transactions and parties involved. 4. On 30th November, 2006, cases of said group were centralized with DCIT, Central Circle-19, New Delhi and assessment of Sh. Brij Mohan Gupta Group cases were completed under Section 153A of Act. Sh. Brij Mohan Gupta, admitted his involvement in unaccounted hundi / undisclosed cash transactions on behalf of various parties which included respondent and also disclosed brokerage income earned by him in such transactions. Accordingly, contents of documents found and seized and statements recorded on oath were forwarded to Assessing Signature Not Verified Digitally Signed ITA 1173/2017 Page 2 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 Officer (AO) holding jurisdiction to undertake action under Section 153C/148 of Act against respondent. 5. On 19th March, 2008, on being satisfied with said information furnished by DCIT, Central Circle-19, concerned AO initiated action under Section 148. Therefore, in response to said notice, respondent stated that his previously filed ITR be accepted in compliance to said notice. AO observed that ITR so relied upon by respondent did not disclose any transaction of cash loans with Sh. Brij Mohan Gupta group and same was contrary to evidence unearthed during search. On this basis, show cause notices were issued to respondent under Section 142(1) of Act granting him opportunities to appear before AO and to prove his case. Such opportunities were not availed of and this ultimately led to framing of assessment order under Section 147/143(3)/69A of Act assessing respondent s total income at Rs.3,72,91,670/- which included undisclosed cash transactions amounting to Rs.3,70,00,000/- representing respondent s unexplained income which had escaped assessment. 6. In appeal filed by respondent, CIT (A) deleted addition made by AO. Thereafter, when Revenue carried matter further in appeal, ITAT confirmed order of CIT(A) on ground that issues in appeal were directly covered in previous appeals as decided by ITAT E Bench in case of DCIT v. Mahabir Prasad Gupta in ITA No.713 & 714/Del/2011 vide order dated 23rd November, 2012 and in case of Ashok Prasad Gupta v. Commissioner of Income Tax in ITA No. 4417 to 4420/Del/2009 vide order dated 16.06.2011. Signature Not Verified Digitally Signed ITA 1173/2017 Page 3 of 8 By:SAPNA SETHI Signing Date:17.03.2020 11:57:08 7. By way of present appeal, Revenue has assailed order of Tribunal. Ms.Easha Kadian, appearing on behalf of Mr.Raghvendra Singh, Sr. Standing counsel for Revenue argues that order passed by Tribunal suffers from perversity, material errors and illegalities, inasmuch as Tribunal has erroneously relied upon orders passed by coordinate Bench of ITAT in case of DCIT v. Mahabir (supra) and in case of Ashok Prasad Gupta (supra). It is argued that ITAT has failed to appreciate that Sh. Brij Mohan Gupta and his group s engagement in hundi business stood proven and unchallenged by respondent. It is further argued that cash advances from respondent by Sh.Brij Mohan Gupta in subject year were expressly recorded in seized documents which formed part of regular books of business and no better evidentiary and documentary proof could be expected from such transactions. 8. At outset, it is noticed that on 20th December, 2017, this Court recorded submissions of learned counsel for Revenue and directed learned counsel to produce subsequent order made by AO after fresh determination in lieu of remand made in case of Ashok Prasad Gupta (supra). said order reads as under: CM No.46522/2017 (exemption) Exemption is allowed subject to all just exceptions. ITA 1173/2017 1. It is stated that impugned order in present case arises out of common search proceedings involving B.M. Gupta Group as concern. reassessment proceedings were initiated in respect of present assessee culminating in addition of Rs.3,72,91,670/-. CIT(A) accepted appeal and directed deletion of major Signature Not Verified Digitally Signed ITA 1173/2017 Page 4 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 portion of amount, i.e. Rs.3.70 crores. On further appeal, Revenue's contentions were rejected on ground that ITAT's previous decision in Deputy Commissioner of Income Tax Vs. Mahabir Prasad Gupta (ITA 713 & 714/Del/2011 - by order dated 23.11.2012 governed case. 2. In identical circumstances arising out of same search proceedings, this Court in Commissioner of Income Tax vs. Lakhmi Chand (ITA 1124/2017), on 08.12.2017, passed following order in Revenue's appeal stating as follows:- " Learned counsel for Revenue relied upon order of this Court in ITA No. 282/2012 in case of Ashok Prasad Gupta Vs. Commissioner of Income Tax, decided on 13.09.2012. It is submitted that Court remitted matter to AO for fresh determination. said order along with subsequent event i.e. order of AO/CIT (A) shall be made available to Court on next date of hearing,since IT AT has relied upon its previous order in that case. List on 26.02.2018. " 3. Accordingly, Revenue shall produce subsequent order made by AO after fresh determination, in view of remand made in Ashok Prasad Gupta Vs. Commissioner of Income Tax, decided on 13.09.2012. 4. List on 26.02.2018. 9. Since December, 2017, Revenue has failed to place on record said order. Today, once again time is being sought to produce said order. However, having regard to fact that more than two years have lapsed and Revenue has failed to place order on record, we have proceeded to hear matter on merits. 10. learned counsel for respondent, submits that at time of Signature Not Verified Digitally Signed ITA 1173/2017 Page 5 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 issuance of notice by this court, since respondent was not represented, it could not bring to notice of this Court that in Commissioner of Income Tax-X v. Mahabir Prasad Gupta, ITA No. 814/2015, vide order dated 20th October, 2015, appeal of Revenue has been dismissal on merits. He submits that in view of said dismissal, nothing survives in present matter, in as much as material which forms basis for re-assessment was not found to be sustainable for initiating action pertaining to Mahabir Prasad Gupta (supra), which is germane for action initiated against Respondent. 11. We have perused impugned order and notice that ITAT has given finding of fact that case of respondent is covered with decision of ITAT in cases of Mahabir Prasad Gupta (supra) and Ashok Prasad (supra). relevant portion of impugned order read as under: 4. In circumstances and fact of case, we are of view that case is fully covered with decision of ITAT in cases of Mahabir Prasad Gupta (Supra) and Ashok Prasad Gupta (supra) and further observed that Revenue could lay its hands on diary of Sh. Brij Mohan Gupta where names of persons were recorded in quoted words and revenue could not establish name of assessee from such quoted words. Though Revenue has placed on record statement of Sh. Brij Mohan Gupta, Ram Avtar Singal and Rajiv Gupta but still Revenue has failed to establish link between information noted in abbreviated form and assessee. diary was neither found from promises of assessee nor in hand writing of assessee any third person may write name of any person at his sweet will, in such circumstances assessee cannot be put to any liability on action of third person, same has to be corroborated by Revenue which has not been done in present case. In circumstances Signature Not Verified Digitally Signed ITA 1173/2017 Page 6 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 and facts of case, we do not find any infirmity in order of Ld. CIT(A) who has rightly deleted additions so made by AO. Accordingly, all grounds of Revenue are dismissed. 12. In case of Commissioner of Income Tax v. Mahabir Prasad Gupta (supra), this Court has examined facts and concluded that concurrent finding of facts cannot be disturbed as there was no material which could justify assessment order. relevant portion of said order which reads as under: 13. above submissions fail to persuade this Court to interfere with matter. Concurrent findings of fact have been rendered by CIT (A) as well as by ITAT. Nothing has been pleaded in memorandum of appeal to persuade Court to hold that those findings are perverse or contrary to facts on record. Secondly, there is not whisper in order of AO about any bag recovered from premises of Assessee during search of Assessee s premises on 22nd March 2006. There is no such averment even in memorandum of appeal filed before this Court. material referred to in order of AO is that which was recovered from premises of Mr. Brij Mohan Gupta and nothing else. That material has been discussed threadbare in order of CIT (A). Detailed reasons have been given as to why that material was insufficient to link Assessee with MP Gupta whose name finds mention in diary and documents seized from premises of Mr. Brij Mohan Gupta. 14. Consequently, Court is not persuaded to permit Revenue, for first time, before this Court to set up entirely different case of there having been bag seized from premises of Assessee which according to Revenue contained incriminating material against Assessee. Signature Not Verified Digitally Signed ITA 1173/2017 Page 7 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 13. In view of aforesaid facts and concurrent findings given by CIT (A) and ITAT, it is evident that Revenue has not been able to produce any cogent material which could fasten liability on respondent. CIT(A) has also examined assessment record and has observed that AO did not make any further inquiry/investigation on information passed on by DCIT, Central Circle-19, New Delhi. No attempt or effort was made to gather or corroborate evidence in this relation. 14. In these facts and circumstances, we are not inclined to entertain present appeal as no substantial question of law arises for our consideration. Accordingly, present appeal is dismissed. SANJEEV NARULA, J MANMOHAN, J MARCH 11, 2020 Pallavi Signature Not Verified Digitally Signed ITA 1173/2017 Page 8 of 8 By: SAPNA SETHI Signing Date:17.03.2020 11:57:08 Commissioner of Income-tax v. Sant Lal